Chip Eng Seng C29

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Chip Eng Seng Corporation Ltd (CES) is a construction and property group listed on the mainboard of the Singapore Exchange Securities Trading Limited (SGX-ST). The Group’s construction business is undertaken by Chip Eng Seng Contractors (1988) Pte Ltd (CESC) and CES Engineering & Construction Pte. Ltd. while CEL Development Pte. Ltd. (CEL) is its property investment and development arm.

 

Pricing

Trading at 52 weeks high price at $1.07 and close at $0.72 on 20th Nov 2018. P/B ratio is 0.59. This makes it look like an undervalued stock. Will it be a cheap stock or cheat stock to hold in the long run?

 

Revenue by segment

CES is highly backed by Property Developments and with the recent cooling measure by MAS, the latest project Park Colonial is expected to have slower sales as expected. Till date, the project is expected to be 60-70% sold.

In Australia market, Williamsons Estate is expected to hand over all their units by 3Q18.

Construction order book has decline to $480M due to lesser construction projects clinched.

It’s also interesting to see CES going into the Education sector.

What I like about CES

CES have entered into a partnership with an established hospitality group, Park Hotel Group (“PHG”), the four-star hotel features 442 rooms fully fitted with an array of modern amenities. This is a great partnership due to the strong demand for hotel room stays in Singapore.

Pre Casting business is a growing business in Singapore due to the requirement by BCA and with CES A1 classifications as general building contractors. This permits a CES to tender for public sector projects with an unlimited contract value.

 

Good to enter?

The current price is a discount of 67% from 52 weeks high and dividends yield of 5.5%

It is a good time to nibble and add more when it hit $0.66

Author: The Financial Guy

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